Case management: a key pillar of operational excellence in financial institutions

Originating in the United States during the 1920s, case management was initially developed to coordinate care for individuals with long-term illnesses. The personalized and well-coordinated efforts ensured that patients had the best possible outcomes through specialized programs and protocols.

Today, the principles of case management extend beyond medical care and have become widespread in various industries, including finance, insurance, and law. Organizations often inadvertently use case management principles to address complex situations, requiring customized solutions and stakeholder collaboration.

With its innovative and effective approaches, case management inspires and fosters a greater understanding of the importance of tailored solutions across various sectors.

What is case management in financial institutions :

Case management, in its essence, refers to the structured and methodical approach employed by financial institutions to effectively handle and oversee various cases and situations that arise within their operations.

It is a comprehensive process that involves managing a wide range of cases, including customer inquiries, regulatory compliance matters, internal investigations, fraud detection, and resolution of disputes.

Case management entails the systematic gathering, organization, and analysis of relevant information, as well as the implementation of appropriate actions to address the specific needs and requirements of each case. Through the use of comprehensive AML compliance solutions, techniques, and protocols, financial institutions can ensure that cases are properly documented, assigned to the relevant stakeholders, and progress through the necessary stages coherently and efficiently.

The goal of case management is to enable financial institutions to navigate complex situations, resolve issues promptly, and provide effective solutions while maintaining compliance with regulatory frameworks and delivering high-quality customer service.

While case management serves as a comprehensive approach to handling various cases within financial institutions, it is often confused with another related concept: Business Process Management (BPM).

Case management VS business process management :

The choice between case management and BPM hinges on process characteristics and when it comes to determining which process to use, two concrete examples from the field of AML compliance shed light on the appropriate choice.

In the first scenario, a fintech company with a one-person compliance department aims to establish a customer onboarding process.

The process involves screening, completing the KYC form, and deciding whether to enter into a business relationship with the potential customer. If the customer is of low risk or their risk level aligns with the AML/CFT risk matrix, the decision rests solely with the compliance officer. However, if the customer is politically exposed or sanctioned, senior management gets involved, considering the compliance officer’s input. Although case management could potentially address this issue, BPM is the more suitable approach here because the steps involved are clear and defined in advance.

In the second example, a bank seeks to digitize its process for handling transaction monitoring alerts and determining the necessity of filing a suspicious transaction report.

The compliance team consists of a manager and five analysts.

The compliance manager assesses the ongoing alerts daily and can distribute them among team members based on availability, workload, and efficiency while handling some alerts personally.

Processing the alerts involves many steps :

  1. Examining the alert, the customer profile, and transaction history to decide whether to close or follow up on the alert.
  2. At this stage, additional information may be requested from various parties such as the account manager or the customer themselves to justify specific transactions. If the requested information is provided within the given timeframe, the applicant may decide to request further information or close/follow up on the alert, either from the same source or another.
  3. If the party fails to respond within the designated time frame, the alert can be escalated to the branch manager or other means of contact, with the feedback attached to the alert handling report.
  4. Subsequently, the compliance officer reviews the alert to determine suspicions of money laundering or terrorist financing and may request further information from various parties involved in the process.

In this particular scenario, where additional steps like risk assessment and reporting to authorities may be required, it’s apparent that selecting business process management as a preferred approach is exceedingly challenging while opting for case management emerges as the optimal decision for achieving enhanced flexibility, expediency, and precision.

Achieving Success through Case Management Implementation: A Concrete Example

In this example, we will delve into the case of the aforementioned bank and explore how case management has proven to be a powerful solution in simplifying complex processes. It’s important to note that this case management solution is not just theoretical; it is currently being utilized and yielding significant benefits for Vneuron’s customers.

To begin, the bank has implemented a system where both new and ongoing alerts are consolidated into a centralized platform. Analysts can easily access the tasks assigned to them, while managers have a comprehensive overview of all tasks, allowing for efficient task reassignments based on workload and priority.

 The first step in processing alerts involves utilizing case management’s “360-degree view” feature. Analysts can examine alerts related to suspicious customers and access all relevant data associated with those customers.

This comprehensive view includes the customer’s latest KYC record, their current risk level, and historical information. It also incorporates the customer’s transactional profile and previous alert processing reports.

Armed with this comprehensive information, analysts can make informed decisions on each alert, choosing to close it or initiate a further investigation, all at the click of a button. They can provide justifications for their decisions, ensuring transparency and traceability. Moreover, analysts can request additional information from specific individuals within the bank, either by name or by role, with the option to set deadlines for responses. Remarkably, all of this can be accomplished within the same task, without the need for extensive configuration beforehand.

Once a decision has been made, the concerned individual receives an email containing a link to the alert processing, along with all the relevant information specified by the requester. In this stage the analyst can choose to follow up on the alert personally or escalate it to the compliance officer.

The benefits of this approach are twofold. Firstly, it optimizes the processing time for alerts, significantly reducing response times. Additionally, it ensures the traceability of feedback from various stakeholders, which previously may have been scattered across multiple channels.

Furthermore, digitizing customer relations brings well-known advantages, fostering stronger trust and commercial ties between the financial institution and its customers.

This concrete example vividly demonstrates how the implementation of case management has yielded remarkable improvements in alert processing efficiency, streamlined interactions between different participants, and enhanced traceability. These positive outcomes not only inspire confidence in compliance processes but also contribute to overall customer satisfaction.


Case management best practices :

For effective AML/CFT case management, several key strategies can be employed to enhance the overall process. These strategies include:

  • Establish Clear Policies and Procedures: Having well-defined policies and procedures is crucial for efficient AML/CFT case management. These guidelines should outline the detection, assessment, and treatment of AML/CFT cases in accordance with current regulations. Clear policies provide a consistent framework for handling suspicious activities and ensure compliance across the organization.
  • Utilize Advanced Technologies: The use of advanced technologies plays a vital role in enhancing AML/CFT case management. Compliance systems based on case management can greatly improve efficiency by facilitating seamless interactions between different stakeholders. These tools can swiftly identify suspicious activity, streamline workflows in a structured manner, and provide comprehensive analysis for informed decision-making.
  • Analyze the Specific Context of the Financial Institution: It is essential to study the unique context of the financial institution, including the composition of the compliance team and existing processes for managing customer files. Conducting an in-depth analysis enables the design of a tailored process that incorporates the expertise of case management professionals in compliance. This analysis can help digitize existing processes while also identifying areas for improvement and optimization.
  • Foster a Culture of Compliance: Cultivating a corporate culture focused on compliance and the fight against financial crime is vital. Regularly raising employee awareness of AML/CFT risks and providing appropriate training is crucial for ensuring a well-informed workforce. Encouraging collaboration between different teams and promoting a proactive approach to case management further strengthens the overall compliance efforts.

By combining clear policies and procedures, advanced technological tools, an in-depth analysis of the specific context of the financial institution, and a corporate culture focused on compliance, successful AML/CFT case management can be implemented. These approaches enhance the ability to detect, assess, and address suspicious activities, thereby helping prevent and combat financial crime effectively while ensuring compliance with current regulations.